Firm Starting Securities Investigation of Alpha Natural Resource - Beckley, Bluefield & Lewisburg News, Weather, Sports

Firm Starting Securities Investigation of Alpha Natural Resources

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A private law firm based in Alabama is investigating the possibility that Alpha Natural Resources violated securities laws by issuing false and misleading statements to investors.

According to a news release from Burke, Harvey & Frankowski LLC, the firm has commenced an investigation into the company. Alpha Natural Resources has become one of the largest employers in West Virginia since acquiring Massey Energy Co. last year.

Alpha is also one of the largest coal producers in the world.

The release from Burke, Harvey and Frankowski said Alpha made misleading statements in respect to their merger with Massey Energy.

"After the Merger was completed, ANR gradually disclosed very serious problems that the Company was experiencing at its Emerald mine in southwestern Pennsylvania, one of the Company's most important coal mines," the release states. "During 2011, the Emerald mine shipped almost one million fewer tons of coal than the Company had estimated pre-Merger. The price of ANR common stock has fallen approximately 72 percent since the Merger was completed."

The firm said Alpha said previously said that problems at the Emerald mine would be resolved by the end of June 2011.

Alpha CEO Kevin Crutchfield commented on the Emerald mine in the company's third quarter results last year.

"Alpha's financial results were impacted by the ongoing geological challenges at our Emerald longwall mine, a notice of force majeure from a steelmaking customer in the Middle East, and protracted quarterly price negotiations with some Asian customers that led to delayed shipments of metallurgical coal, as well as lower than expected production at several legacy Massey mines," Crutchfield said.

Since then Alpha has made it clear that problems at the Emerald mine "were far more severe and potentially long-lasting that the company had previously disclosed," this week's news release states.

According to second quarter results announced by Alpha Natural Resources, problems at the Emerald longwall mine were one of the primary factors of higher cost of coal sales per ton for Eastern coal.

"As the true severity of the problems at the Emerald mine was revealed, and as the Emerald mine shipped significantly less coal than the Company had previously estimated, ANR's costs of coal production rose dramatically," the firm's release states. "We are investigating whether the Company properly disclosed the problems at Emerald mine in the Registration Statement and other relevant documents it issued in connection with its June 1, 2011 Merger involving Massey Energy Co."

According to Alpha Natural Resources annual report, Emerald shipped 3.7 million tons of coal in 2011.

The law firm is seeking Massey shareholders who acquired shares of Alpha Natural Resources in the June 1 merger. Those who acquired shares in Alpha who want to discuss the investigation can contact attorney Richard Frankowski at rfrankowski@bhflegal.com or via toll-free telephone at (888) 930-9091 at no cost.